Impersonal Trust in Global Mediating Organizations

Abstract

The concept of impersonal trust in indirect social relationships is often treated as analogous to the personal trust of direct interpersonal relationships (whether "primary" or "secondary"). Studies in economic sociology of personal networks and overlapping trust relations among directors of major corporations, however, regard trust (or mistrust) as more exclusively a "property" of direct relationships. Personal trust relations, this study argues, are qualitatively differentfrom impersonal ones, such as global mediating organizations of trust that give institutional promises to guard investments againstfuture risk. They attempt tofulfill the claims of economic rationality in the face of the insuperable problem of temporality. Impersonal trust organizations include multinational accountancy firms and credit-rating agencies that provide allegedly reliable and objective ratings offirms and governments tofinancial speculators. Although a director of Moody's Investors Services argues (with reference to the 1997 East Asian "crisis ") that "markets are made up of atomised individuals, outside the controls of even the most vigilant governments, " this neglects the mediating trust organization itself, an "authority" that not only constantly tries to maintain its trustworthy appearance but one that unintentionally gives rise to increasing constraints and lack of agency. The implications of paying greater attention to impersonal trust in such global organizations are discussed.

Building Trust in Economic Space

“…There is also recognition of the importance of distinguishing between trust, a belief in the ability of an individual to meet a mutually beneficial expectation, and trustworthiness, a trust-granting incentive (Mayer et al, 1995;Hardin, 1996;Glaeser et al, 2000). Moreover, numerous scholars have identified different forms of trust (eg, trust based on shared experiences or trust driven by institutions) and documented their particular contributions to exchange relationships, economic development, innovation, and the constitution of networks (Luhmann, 1979;Zucker, 1986;North, 1990;Sako, 1992;Williamson, 1993;McAllistar, 1995;Becker, 1996;Cooke and Morgan, 1998;Nooteboom et al, 1997;Doney et al, 1998;Humphrey and Schmitz, 1998;Rousseau et al, 1998;Sako and Helper, 1998;Pixley, 1999;Schmitz, 1999;Sztompka, 1999;Hardin, 2001;Heimer, 2001;Murphy, 2002;Ettlinger, 2003;Bathelt et al, 2004;MacKinnon et al, 2004;Glückler, 2005). Despite the convergences, however, there are significant differences in the ways in which trust is conceptualized and operationalized in the literature.…”

Self-regulatory investments among private actors in the era of regulatory capitalism: the licensing of Swedish finance and securities industry employees

“…Accordingly, there was greater demand for and acceptance of standardized systems and Bimpersonal trust^ [64,65]. 3 3 The concept Bimpersonal trust^refers to a type of social relationship where transactions between people are mediated by (or Bembedded in^) a formal social organization rather than in personal social relations.…”

“…Instead of trust based on some kind of personal knowledge or recommendations actors are acting on the basis of the trust that emanate from the investments in institutional anchored resources, as a graduate, a professional title or a license. See [64][65][66] for a discussion.…”

Trust and control – a symbiotic relationship?

“…Shapiro (1987) describes the growth in agency relationships which underpin modern economic activity, analyzing the ways in which individuals manage the risks involved and identifying the need for impersonal trust when principals and agents have no social contact.``Guardians of trust'' ± institutions, professions, regulatory agencies ± make such relationships possible. Pixley (1999) PAGE 30 | CORPORATE GOVERNANCE | VOL. 3 NO.…”

“…This may be at odds with the self interest of individuals concerned and increases the importance of aligning individual and organizational goals through recruitment, socialization and reward structures (Pixley, 1999;Spreitzer and Mishra, 1999). The technique clearly enables the internal auditor to move away from explicit compliance monitoring and direct checking of employees' actions but the ef®cacy of this process depends crucially on trust.…”